Why Dealerships Offer Significant Discounts in December
Car showrooms often see a surge in discounted prices during the month of December for a variety of reasons. From meeting end-of-year sales targets and the release of new models to holiday promotions and tax incentives, multiple factors contribute to making December one of the best times to purchase a car.
Understanding Gross and Strokes: A Closer Look at Sales Techniques
Before diving into the discounts and seasonal promotions, it's important to understand the concepts of gross profit and strokes. These terms are crucial in the language and mindset of car salespeople.
Gross or Gross Profit is the difference between the dealership's invoice price and the sale price. Dealerships prioritize maximizing gross profits, especially in the last few weeks and days of each month. This is why car buyers should be cautious of purchasing during these times. Sales managers are particularly hesitant to approve deals unless they include a healthy gross profit. Most dealerships operate under this model, except for the high-volume categories.
Strokes refer to the number of vehicles sold and delivered. This term is used in the industry to track sales and can come with additional commissions and bonuses. Therefore, the last few days, especially the last day of the month, are ideal for buyers to secure the best deals. Discounts and special deals, such as lower interest rates, dealer-installed accessories, and extended warranties, are commonly offered to end-of-month buyers.
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It's a strategic time for potential buyers to return after a week or two and renegotiate prices. The last day of the month is when dealerships focus on pushing deals and closing sales to maximize profits. However, it's equally important to note that pre-owned or used vehicle sales also benefit dealerships. Even during the month-end frenzy, buyers shouldn't expect these vehicles to be given away for free.
Strategies for Securing the Best Deals
To maximize your chances of securing the best deals, begin the car-buying process well before the end of the month. Start by establishing a connection with a salesperson, choosing the right vehicle, and obtaining a starting price. However, do not sign anything during the initial visits. This is a crucial strategy to ensure you have the leverage to negotiate better deals.
After a week or two, return to the dealership to get a second price quote and replay the negotiation game. By doing this, you can create a sense of urgency and leverage for the dealership to offer you the best deal. Additionally, avoid financing through the dealership and use your own bank's financing options for better terms.
Conclusion
The month of December offers an array of opportunities for car buyers to take advantage of discounts and promotions. By understanding the dealership's strategies and employing smart negotiation tactics, shoppers can secure the best deals on new and pre-owned vehicles.